Hindustan Zinc shares: Buy, hold or sell this Vedanta arm? HZL target prices

While zinc price is benefitting from supply disruptions, silver has been volatile since June 2026, and rising rates may pose near-term pressure, it warned. Vedanta Ltd owned 60.71 per cent in HZL.

"We raise FY27E EPS by 5 per cent but cut FY28-29E EPS by 4 per cent on lower silver prices. HZ trades below long-term average EV/Ebitda; recovery in silver price would be key for stock performance," it said.

HZL's Q2 revenue beat MOFSL estimates, driven by favorable commodity prices, better volume, and a stronger dollar. Ebitda too came in higher than expectations on account of favorable metal prices and lower cost of production. Ebitda margin stood at 61.3 per cent. The HZL management reiterated its FY27 refined metal production guidance of 1.1 mt.

MOFSL said HZ reported strong earnings in Q2, primarily driven by favorable metal pricing, better grades, and higher by-product NSR, which supported lower cost of production. The company continued to focus on ramping up production, improving operational efficiencies, and maintaining tighter cost control, which should support margin sustenance.

"The recently announced expansion plans align with HZ’s long-term objective of doubling its existing capacity and enhancing long-term earnings visibility. However, near-term earnings growth is likely to remain constrained by limited capacity headroom, making LME/silver price inflation the key catalysts for incremental earnings upside," it said while suggesting 'Neutral' and a target of Rs 600 on the sock.

Nuvama said it has raised its FY27 Ebitda estimate for HZL by 8 per cent to factor in higher zinc prices. "We are factoring in LME zinc price of $3,525/3,200 per ton in FY27/28E. Retain ‘BUY’ with a target of Rs 676 from Rs 700). HZL currently trades at 6.6 times estimated FY28 EV/Ebitda versus 10-year average of 7.8 times," Nuvama said.